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HP unseats Big Blue as server king

10 years after Compaq buy

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The triple-whammy of declining mainframe and Power Systems server sales and a resurgent X64 market has toppled IBM from the top rank in the server racket, according to statistics released by box counter Gartner.

That means Hewlett-Packard has finally fulfilled its goal — since buying Compaq nearly a decade ago — of unseating Big Blue.

Depending on how the current Power7 machines and future System z11 mainframes do, and what the long-term prospects are for any non-X64 server are, this could be a permanent change in the rankings.

In the first quarter of 2010, HP pushed $3.39bn in iron, growing revenues by 15.9 per cent and giving it a 31.5 per cent share of the server pie. IBM said a month ago that both its mainframe and Power Systems lines suffered a 17 per cent revenue decline in Q1, and a revitalized System x lineup that drove a 36 per cent revenue shot was not enough to wipe out the mainframe and Power declines, as far as Gartner can tell. Therefore, IBM's overall server revenues fell by 2.1 per cent to $3.05bn, giving it a 28.4 per cent slice of the server pie.

Dell ranked third, and showed a 35.5 per cent revenue jump, to $1.67bn, while number four Fujitsu had a meager 7.8 per cent bump, to $645.3m in sales during the first quarter. Oracle stomached a 38.7 per cent drop, with only $597.9m in server revenues, but that is to be expected given that Oracle only closed the Sun Microsystems acquisition at the end of January and has all but abandoned the volume X64 business that Sun so desperately wanted to partake in. All other vendors accounted for just a tad under $1.4bn in revenues for servers sold during Q1, rising 7.8 per cent from Q1 2009, when the economic meltdown knocked the wind out of server sales.

All told, worldwide server sales in Q1 rose by 6 per cent, to $10.75bn, and shipments, buoyed by a rebounding x64 sector, rose by 23 per cent to 2.11 million units.

"We've seen a return to growth on a worldwide level," explained Jeffrey Hewitt, research vice president at Gartner in a statement accompanying the server stats. "But the market has not yet returned to the historical quarterly highs that were posted in 2008, and there were some interesting variations in that growth. Emerging regions that were expected to grow, such as Asia/Pacific, forged ahead, while some mature markets, such as the US, produced better-than-expected results, as other countries and regions had a 'mixed bag' of results."

RISC/Itanium Unix server sales had a 28.5 per cent decline in units, to a mere 46,117 machines, and revenues here fell by 26.9 per cent, to $2.15bn. Within the Unix space, Oracle was the top shipper, with 18,761 boxes, but shipments fell by 41.9 percent for its Sparc iron. Oracle's Unix revenues were off 44.7 percent, to $454.4m. IBM was the number two Unix box shipper, with 17,361 boxes going out the door, but it was the Unix revenue leader, with $949.1m in sales, down 15.3 per cent.

(Gartner counts server revenues a bit differently than the vendors do, hence the different between what IBM said it did and what Gartner says it did).

HP had the third position in Unix when it comes to shipments, with only 7,544 boxes going out (understandable given the launch of the "Tukwila" quad-core Itaniums in March). It generated $598.9m in revenues for HP-UX boxes, 28 per cent lower than this time last year. In terms of percentages, Fujitsu's Sparc/Solaris server biz did relatively better, with shipments of 1,969 machines (down 10.7 per cent) and revenues of $102.2m (down 14.7 per cent).

The X64 chip was the engine of the strengthening server recovery, with 2.06 million machines shipped, up 25.3 per cent, and $7.18bn in aggregate revenues, up 32.1 per cent from the first quarter of 2009.

Stay tuned for IDC's numbers, which will give us a look at how servers did in terms of server size and operating system platforms. When one IT box counter talks, the other is never far behind. And both want to get this done before the Memorial Day holiday in the States. ®

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